California Employee Expense Reimbursements

The federal statute known as the Fair Labor Standards Act (FLSA) requires employers to pay overtime and minimum wage for non-exempt employees.  As a federal law, the FLSA applies nationwide. However, some states offer more protection than the FLSA. For example, in California, employers are required to reimburse employees for necessary expenses incurred while performing their jobs.

This requirement comes from Section 2802 of the California Labor Code, which ensures that employees are not forced to pay out-of-pocket for work-related expenses. Section 2802 specifically states: “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties . . .” The protections of § 2802 are broad and apply to all employees.

Here are a few examples of how § 2802 operates:

Personal Vehicles

When employees use their personal vehicles for work purposes, employers must reimburse them for the associated costs. Reimbursement should cover all expenses related to the vehicle’s use, including maintenance, insurance, and wear and tear. The most common method for calculating this reimbursement is by using the IRS standard mileage rate, which provides a per-mile rate that factors in all these costs.

For example, if the IRS mileage rate is 67 cents per mile and an employee drives 100 miles for work, the employer would reimburse $67.

Use of Personal Cell Phones

Similarly, if employees use their personal cell phones for work, employers must cover a fair share of the costs. This includes voice calls, text messages, and data usage necessary to perform their job.

One approach is for employers to reimburse a reasonable percentage of the employee’s phone bill. For example, if it’s determined that 30% of the phone usage is work-related, then 30% of the monthly bill should be reimbursed. If you work in California and believe you have not been properly reimbursed for expenses you incurred as a direct result of your job duties, please contact Shavitz Law Group at [email protected].

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